While there’s growing demand for Canadian institutional investors to get more involved with financing of startups, another big and untapped source of financing is Corporate Canada.
By investing in startups, companies can support smart and leading-edge startup entrepreneurs and, as important, gather competitive intelligence, real-world information and knowledge that can provide invaluable strategic and tactical benefits.
Unfortunately, Corporate Canada doesn’t appear to have much an appetite for startups, which is why a Globe & Mail story about Waste Management Inc. jumped out. WMI’s venture capital operation, Organic Growth, has made about 30 investments focused on the renewable energy, recycling and waste management sectors.
This includes an 11% stake in Montreal-based Enerkem Inc., including a $7.5-million directly in a commercial-scale plant being built by Enerkem in Edmonton. Organic also invested in London-based Harvest Power, which converts organic waste to fertilizer and gas, which is used to generate electricity.
The Canadian companies providing support to startups include Research in Motion, which was involved in the BlackBerry Fund and, most recently, Communitech’s HyperDrive accelerator.
Rogers Ventures was created to support startups but it has moved to Silicon Valley, so it’s unclear whether it will still actively invest in Canadian startups. Telus has a venture capital arm but it doesn’t seem be making many investments. BCE Inc. used to have a venture capital arm before it was spun off as an independent entity in 2007 (it’s now known as Summerhill Venture Partners).
In an ideal world, most of Canada’s largest corporations should be involved with startups directly or indirectly. Even putting aside a few million dollars a year would offer the potential for significant ROI, not only from the value of their investments but the insight and knowledge gained from backing entrepreneur pursuing new and innovative ideas. Loblaw, for example, could get tremendous insight into the future of e-commerce and online sales by offering startup capital.
If you know of Canadian companies investing in startups directly or indirectly, send me an email (firstname.lastname@example.org) or leave a comment.